Advanced Accounting Exam #3 100% VERIFIED

Advanced Accounting Exam #3 100% VERIFIED Safe payments are equal to the recorded capital balances of partners with positive capital balances. - ANSWERFalse The purpose of a marshaling of assets is to protect the interests of various creditors - ANSWERTrue The proper ranking of property distributions stipulated by the Uniform Partnership Act follows the order of those owing to separate creditors, those owing to partnership creditors, and finally those owing to partners by way of contribution. - ANSWERTrue Partnership assets may be used to pay a partner's personal creditor prior to payment to partnership creditors. - ANSWERFalse When a partner is insolvent, the partner's personal assets should first be used to settle the claims of his or her personal creditors. - ANSWERTrue The partnership of Nurr, Cleamons and Kelly was insolvent, as was Cleamons personally. The partnership had begun liquidating its assets and Cleamons' capital account had a debit balance. How would the claim of Nurr and Kelly against Cleamons be ranked in comparison with the claims of Cleamons' other creditors? - ANSWERIt ranks lower in priority than Cleamons' personal creditors and the creditors of the partnership What is a marshaling of assets? - ANSWERA ranking of claims against an individual